Increasing World Oil Price & Gold : Effect of Rising Tensions in the Middle East Region

As had been reported by, Russian aircraft was shot down by Turkey that indicated a rising tensions in the Middle East Region last Tuesday (24 November 2015). Turkey claimed that Russian aircraft was flying in the area of Turkey and had made 10 times violation before, while on the other hand, Russia believed that the aircraft was still flying in the territory of Syrian. 

Russian aircraft shot down by Turkey, Nov 24 2015 (BBC INDONESIA)

This increasing geopolitical issue had made the price of crude oil increases as well. Many believe that this tensions in the oil-rich region will in turn affect the oil supply. Not only the price of crude oil, the geopolitical tensions in the Middle East region has made US Dollar depreciated, that in turn made many investors switch their investment to gold. Thus, the price of gold increased 0.66% (USD 1,073.80 / ounce). When political situation is not conducive, investors tend to choose gold which is considered as a safe-haven asset, a 'currency' that can't be manipulated by any interest rate policies and can be use as a hedge to face inflation.  

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